By Gerri Elder
The foreclosure epidemic has given rise to a new brand of crooks - the foreclosure rescue scammers.
These crooks solicit distressed homeowners who are facing foreclosure and snatch the homes out from under them under the guise of "foreclosure fixers."
Foreclosure rescue scammers’ first work to isolate the homeowner from any real help available. Homeowners are often told to stop talking with their mortgage companies, credit counselors and not to call bankruptcy lawyers. They convince the homeowners that they are loan modification consultants who will take care of everything.
In the end, everything is taken care of, just not in the way the homeowner wants or expects.
Foreclosure rescue scammers do not negotiate with the mortgage company on behalf of the homeowner. Instead, they get to work on relieving the homeowner of the property entirely.
Many of the foreclosure rescue scammers talk the homeowners into "saving" their homes by signing ownership of the property over to the scammers. The homeowners believe that if they make the mortgage payments to the "foreclosure rescue" company, they’ll get ownership of their homes back.
But after the documents transferring the property are signed, the foreclosure rescue scammer either sells the property or takes the mortgage payments from the homeowner without ever paying the mortgage company, allowing the home to go into foreclosure.
That way, the homeowner loses not only their home, but the fees paid to the foreclosure rescue scammer too.
Dateline NBC and the Associated Press recently highlighted the foreclosure rescue scam problem.
North Carolina Attorney General Roy Cooper told the Associated Press that foreclosure rescue scams are misdemeanors and it’s difficult to get prosecutors to investigate.
In most states, the foreclosure rescue scammers have a good chance of never being criminally charged and most walk away scot-free.
Some states have passed laws in an attempt to stem this growing fraudulent business model. However, many prosecutors believe the cases should be handled in civil court instead. Civil court actions are designed for financial recovery.
The Associated Press reports that attorney general offices in a handful of states are seeking criminal charges against foreclosure rescue scam artists.
Homeowners would still be more likely to recover damages in civil court, but these offices believe criminal prosecution is key in stopping the explosion of these devastating scams.
Foreclosure rescue scammers see the foreclosure crisis as a target-rich market and they are taking full advantage of it. Many know which areas are currently criminally prosecuting and may avoid those states. However, since the threat of criminal prosecution is slim in most states, there are plenty of distressed homeowners to scam and these criminals are working overtime.
If you are facing foreclosure, don’t let anyone steer you away from legitimate help. Speak with a bankruptcy lawyer today about your options.
Chapter 13 bankruptcy can be an effective foreclosure fighter but foreclosure rescue scammers will probably never tell you about it.
The rule of thumb here is, stick with trusted professionals. Foreclosure rescue agents are professional scam artists and should be avoided at all costs.